403 Forbidden

A study out Tuesday finds that Oregon and Washington offer some of the most lucrative tax breaks in the nation to large data centers.

Washington provided tax breaks worth $57.4 million to data centers in its last fiscal year, according to the report, which valued Oregon's incentives at $33.7 million. Georgia was the only other state in that range, with incentives of $42 million in fiscal 2013.

Data center tax breaks

The states with the largest annual tax exemptions for data centers

1. Washington: $57.4 million (2016)

2. Georgia: $42 million (2013)

3. Oregon: $33.7 million (2015)

4. Wyoming: $28.6 million (2014)

5. North Carolina: $16.5 million (fiscal 2017)

6. New York: $14 million (2016)

7. Michigan: $11 million (2015)

8. Texas: $11 million (2011)

9. Minnesota: $8.78 million (2016)

10. Arizona: $1.7 million (2013)

Source: Good Jobs First

The findings come from Good Jobs First, an advocacy organization that tracks government spending on economic development. The report is critical of the data center incentives because server farms produce relatively few jobs - even a large facility might employ just a few dozen people.

Apple and Amazon also have large data centers in central and eastern Oregon, while several smaller facilities have taken advantage of tax breaks to build server farms in Hillsboro.

Good Jobs First recommends that state and local governments cap the value of tax breaks at $50,000 per job. In Prineville, where Facebook has about 150 employees, that would limit the value of its tax incentives to $7.5 million. Facebook received exemptions worth $15.7 million in the 2014-15 fiscal year, according to state data.

On a statewide level, 150 jobs represent a negligible contribution to Oregon's economy. In tiny Prineville, though, with roughly 9,000 residents, Facebook and Apple data centers have had a profound effect on the local economy.

For example, franchise fees generated by data centers' electricity use generated $1.6 million for Prineville in its last fiscal year. The city's general fund budget was $6.4 million.

Franchise revenue will likely rise in the coming years as Apple and Facebook complete work on additional data centers and those begin operating.